Reuben Brothers Bet on $2 Billion Puerto Rico Coastal Project

Natalie Wong and Jim Wyss, Bloomberg News

The project, called Esencia, will include luxury hotel rooms and branded residences at a site on the island’s west coast. Photographer: Andy Lyons/Getty Images , Photographer: Andy Lyons/Getty Images

(Bloomberg) -- Reuben Brothers and Three Rules Capital filed a master plan for a more than $2 billion development in Puerto Rico with its own private airport and views of the Caribbean Sea.

The project, called Esencia, will include luxury hotel rooms and branded residences at a site on the island’s west coast, according to a statement Thursday. The development will be anchored by hotel operators including the Aman Group, Mandarin Oriental Hotel Group and Rosewood Hotels & Resorts. Meanwhile, the developers are working with JPMorgan Chase & Co. as the lead bank for financing.

“Puerto Rico, and its west coast specifically, is a beautiful and vibrant place and one of the most promising growth markets in the world,” Jamie Reuben, a principal at Reuben Brothers, said in an emailed statement. “We saw an opportunity to make a transformative investment while creating thousands of jobs.”

The site includes more than 2,000 acres (809 hectares) of land, and will feature two golf courses, an equestrian center and a bilingual K-12 school. The plan will be implemented in five phases, with the first expected to be completed three years after starting construction.

Billionaires Simon and David Reuben’s real estate investment company owns properties around the world including Los Angeles’ Century Plaza and Admiralty Arch in London. The Reuben brothers have a combined net worth of about $15.6 billion, according to the Bloomberg Billionaires Index.

The new Esencia project would be a major development on the island’s west coast and is expected to keep lots of open space for recreation and conservation, with the development limiting structures to 23% of the land or less.

Puerto Rico has become a popular spot for wealthy mainlanders — particularly traders, financiers and the crypto wealthy — as it provides some of the most lucrative tax breaks in the hemisphere.

The US territory of 3.2 million people began offering sweeping tax breaks in 2012 with the hopes of attracting people who might help boost the economy. Individuals who qualify pay no taxes on dividends, interest and capital gains. More than 6,000 people have been approved for the “resident individual investor” program since its inception.

The influx has also given rise to exclusive enclaves. One of the best known is called Dorado Beach, a gated community on the northern shore, where YouTuber-turned-boxer Jake Paul has bought a home. A penthouse in the resort recently went on the market for $49 million.

The Esencia development is expected to have up to 900 branded residences.

Across the luxury residential and resort market, “the growing and resilient customer base has led to demand outstripping supply,” Will Bennett, co-founder of Three Rules, said by email. “This is particularly the case in Puerto Rico, with its local government’s success promoting tourism growth.”

(Corrects to remove reference to John Paulson owning a home in Dorado Beach in 9th paragraph.)